Highly rated auto service shop eschews commissions for salaries

Veteran auto mechanic Mike Bishop could have told Sears' chairman, Edward A. Brennan, that the giant retailer was asking for trouble when Sears slashed hourly wages and put its auto mechanics on a commission system three years ago.

Sure enough, in June, the California Department of Consumer Affairs accused Sears of seriously overcharging customers and threatened to revoke the licenses of 70 Sears auto repair shops statewide. The consumer affairs department's chief declared the overcharges a "systematic looting of the public," giving Sears a black eye from which it is still recovering.

The Sears scandal prompted many business owners to question whether paying people on commission is a good idea. According to union officials representing some of the workers, Sears

required mechanics to reach sales quotas of at least $147 an hour.

In recent years, more big and small business owners have begun paying employees on a commission basis in an attempt to boost productivity and cut payroll costs. But, as Sears learned, putting too much pressure on employees to sell products and services can backfire.

"Whenever you put people on a commission basis, you are asking for trouble," said Elaine Locksley, founder of Pacific Palisades, Calif.-based Locksley Group, which specializes in providing market research on customer service issues. "The minute you put that kind of pressure on people, you make them dishonest."

Although about 95 percent of auto repair shops pay mechanics on a commission basis, you will find only salaried employees at Richard's Accurate Import Auto Service in Santa Barbara, Calif. The tidy shop has a wall full of awards to prove that customers like it that way.

"When repair shops pay mechanics on commission, morale is poor and it becomes a cutthroat place to work," said Mr. Bishop, owner of the shop that was named a "Living Legend" by readers responding to a recent consumer poll conducted by the Santa Barbara Independent newspaper.

Why do customers love Mr. Bishop's shop?

"I tell my employees to treat each car like it's their own," said Mr. Bishop, who worked as a mechanic for several major auto dealers before buying the shop from a friend.

Mr. Bishop said his salaried mechanics have no motivation to replace parts that don't need replacing. In fact, he encourages people to repair or clean up original, but functional, parts.

"We try to get people out of here with the least bill possible," said Suzon Bishop, who works with her husband.

The Bishops take customer service seriously. In 1987 they installed Macintosh computers and started working with a software program orders and invoices, but has a tickler file that reminds Mr. Bishop and his employees to call customers they haven't seen in a while.

"We have 7,200 customers, and everything about them and their cars is on file in the Mac," Mr. Bishop said.

By keeping track of every car's repair history, Mr. Bishop reminds customers to come in for scheduled maintenance to avoid expensive breakdowns.

While most mechanics stay only a few months at a shop before moving on, Glenn Tull, the shop manager, has worked with Mr. Bishop for 11 years.

Customer service expert Locksley said Nordstrom, the Seattle-based department store chain, is one of the few companies she's seen that provides excellent service while paying its salespeople on a commission basis.

She suggested that instead of pushing your employees to sell more, you should try making them feel that their jobs are important.

"Tell your employees, 'You are the most important thing in my business because the customers see you, they don't always see me,' " Ms. Locksley said.

Richard C. Whiteley, author of "The Customer-Driven Company," recommended basing incentives on long-term rather than short-term performance and creating group rather than individual incentives.

Mr. Whiteley's book is an excellent resource for any business owner trying to improve customer service. He also discusses compensation options other than commissions. (The book, published by Addison-Wesley, costs $21.95.)